Android Apps Monetization Strategies

Most developers build the app first and then decide on how to make money with it. That’s an entirely wrong approach. A fab app can easily get a startup business off the ground. However, choosing the right way to generate revenues is a key step to success. If a person is determined to make business, he or she should draft a close-to-reality business-plan before actual development. A good marketing plan and monetization strategy are a must have.
Nowadays, a developer has quite a wide selection of monetization approaches. The only challenge is to focus on the right one. The Android platform provides an extensive environment for experiments and Android developers can try advertising and subscription, in-app billing and even paid downloads. Due to elaborated development manuals and guides anyone can implement in-app advertising or purchases, connect to an advertising network. There is a range of ways to make money with a cool app you developed. Virtually you can try any. However, it can’t hurt paying attention to a piece of good advice below.

Paid Apps

The simplest way is to charge money for every download. All you need to do is to make an app, upload it to Google Play, set the price and publish. That’s sensible but rather blunt. It will be good for apps which are already well-known and cool. Otherwise, you will have to invest to promote your product as users are increasingly reluctant to pay for a pig in a poke. Premium apps used to be a standard in 2008-2011. In that time paid downloads were the primary and the only way for developers to make some money. However, the golden age is over. The app supply significantly exceeds the demand and paid content is no more luring. Most apps nowadays are free. What’s more important, most downloaded apps are free as well.
Of course, there are some exceptions to the rule, such as Minecraft, Monopoly, TuneIn Radio Pro, Plants vs. Zombies etc. If your app is not that catchy, it’s better to think of some alternatives. It is possible to launch a lite version of the app for free, providing full functionalities in a paid one. Users will get interested and might eventually pay money and upgrade to the full version.
Launching a paid app on Google Play is risky yet. According to Google policy, if an app is marked as paid, it is not possible to change the status ever after. Even during special promotions the app cannot be offered for free but just at a reduced price, which can only happen if, initially, it was set to more than $0.99. In the same way, free apps cannot become paid ones. However, there is a range of tricks to evade these limitations. For example, usually developers have a free version of some application with internal ads and a paid one without them.
In any case, charging for every download in the Android universe is not rational. It automatically decreases downloads number, unless the app is specialized and well-targeted for a specific audience: miners, pilots, fishermen, hunters etc. If your app functionalities are more general, you’d better think of some other way to earn money by applying a more sophisticated approach.

Free Apps and Advertising

For all the platforms free apps make up about 90% of all the mobile content. According to Google Play stats, the number of free Android apps is twice bigger than that of paid ones.
Free apps can also generate revenue especially if they have ads displayed. It means you should assign some space in your app for third parties. The latter will place ads there depending on the type of your audience or the app domain. Advertisements can be incorporated in different ways: banners, full screen interstitials and more refined ad types which require additional user interaction. When the ad delivers some revenue, you are sure to get your own piece of that pie. However, most of the time that piece is pitiful as advertisers use a pay-per-click approach. Banners produce the least revenues while one can earn some money by inserting an interactive ad between the levels of a game. Nevertheless, on average the app must be very popular to generate modest revenues as generally a user clicks once per about 100 app impressions.

Google can help you in advertising. The Android platform does not restrict an app owner from using other mobile networks, but Google products have its own APIs to increase the value of the mobile content such as AdSense, AdMob, DoubleClick for Publishers or Google Publisher Tag. Besides, there are other popular options such as InMobi, TapJoy etc.
One of the things you should really care about is that most medium-sized ad networks serve ads locally. If an app is downloaded overseas, it can be spoiled by an ugly blank spot. So, backups are a must. To generate high revenues from advertising an app must have very high user engagement and retention values. Fortunately, that’s not a problem for the Android platform. However, one must remember that being too pushy can hurt immensely and constant cheering ads irritate to no end.

Freemium

Freemium is a contraction of the both monetization models described above: free aps and premium content. Some apps are free to download and use. However, there is a wide selection of in-app purchases (IAP) which cost real money – cool weaponry, additional hints in riddles, more gold or timber to build another farm, an additional language or a specialized dictionary in a translation app, fine-grained controls in a utility app and so on. In general, in-app purchases are for users to buy additional resources to upgrade. For now, it is said to be the most successful monetization strategy. Both paid and free apps can have in-app billing. According to App Annie report freemium app revenue now accounts for 98% of Google Play total revenue.
Freemium apps have many advantages over the paid ones. Users get acquainted with the app and are more willing to part with a bit of money from time to time. Developers get their stream of revenues and develop even more fabulous apps. However, there are always flies in the ointment. Sometimes in order to maximize their revenues, developers make a game impossible to complete without additional in-app purchases. A user cannot win it unless he or she pays for the additional items. Such tricks are really obnoxious. Moreover, even constant IAP offers can spoil gaming experience. Some developers go that far as to forget to inform users that their app contains IAPs. It becomes really disappointing in apps for children, some of which have recently been labelled as deceptively costly games. In general, the freemium secret is simple: get the mixture just right and users will pay for that cute gown, cool plasma sword or anything of the kind.
These are the most popular ways for developers to get revenues from an Android app. However, there is a range of less used strategies which can generate good revenues when applied at the right app and at the right time. The affiliate and referral strategies are a smart choice in some fashion, style or wellness apps, which are directly connected to some product. When the user clicks on the relevant content, the developer gets his or her own commission from the retailer or manufacturer.
To cut a long story short, there is no certain approach to app monetization that works wonders. Stories on a raving success of a lucky developer are destined to remain stories for tabloids and web buzz only. However, when creating an app, one must give a second thought to the above. May your app generate high revenues!